Boss Adrian Ringrose says company has learned lessons as it closes division following 拢72m writedown
Interserve is learning the lessons from its troubled energy-from-waste projects division, which is being closed after racking up 拢70m-plus losses, the firm鈥檚 chief executive Adrian Ringrose has told 好色先生TV.
The problems in the energy-from- waste business took the firm to a 拢33.8m pre-tax loss for the first six months of 2016. Ringrose said: 鈥淲hatever doesn鈥檛 kill you makes you stronger - and it won鈥檛 kill us.鈥�
Investors breathed a sigh of relief at the half-year results, posted this month, despite the overall loss and a 拢72m writedown on energy-from- waste contracts, because the writedown was no worse than thefirm indicated in a 拢70m profit warning in May.
Interserve unexpectedly increased its dividend to 8.1p per share, up from 7.9p, to be paid in October, and posted a marginal increase in revenue, to 拢1.85bn from 拢1.8bn, and an unchanged work pipeline of 拢7.6bn.
The firm鈥檚 share price jumped 18% to 拢3.73 on the day of the half-year results announcement (10 August) and was trading higher still at more than 拢4 on Monday before 好色先生TV went to press.
Interserve鈥檚 拢70m profit warning in May blamed a single energy-from- waste job - its delayed Glasgow facility (visualisation pictured) for client Viridor - but this month鈥檚 results announcement spread the blame across all six of its contracts worth 拢430m in the sector, prompting its decision to wind down the division.
Ringrose said: 鈥淚n May we were reacting to a fast-moving deteriorating picture on one project [Glasgow]. We now have three months鈥� more experience.
鈥淚鈥檓 confident we have thoroughly reviewed things and beginning to draw a line under that and move on.
鈥淭here is a lot of hard work ahead and this is not definitive news as the contracts will take 12-18 months to go through completely. But we鈥檝e made some good progress.鈥�
Ringrose said the firm had learned lessons from the loss-making division: 鈥淲e need to go through the basic steps, certainly, in the first instance and really understand all the complexities.鈥�
Ringrose added: 鈥淭his is a solid set of results and there are a lot of good things happening, including strong trading and cash generation and a better order book than the start of the year.鈥�
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